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                                  SCHEDULE 14A
                                   (RULE 14a)
                    INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
 
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            FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
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FIRST UNION REAL ESTATE INVESTMENTS
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                                                                  AT THE COMPANY
                                                                  --------------
                                                               Thomas T. Kmiecik
                                             Senior Vice President and Treasurer
                                                                  (216) 781-4030

FOR IMMEDIATE RELEASE

                       FIRST UNION'S BOARD TERMINATES CEO
                       ----------------------------------

CLEVELAND, OHIO, MAY 18, 1998 -- FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
announced today that its Board of Trustees has terminated the employment of
James C. Mastandrea. Prior to his termination, Mr. Mastandrea had been Chairman
of the Board, Chief Executive Officer, and President of the Trust. Steven M.
Edelman, Executive Vice President and Chief Financial Officer, has been
appointed as interim Chief Executive Officer until a permanent replacement is
found.

Russell R. Gifford, Chairman of the Independent Special Committee of First
Union's Board of Trustees, said, "Over the years, Jim has made a substantial
contribution to the Trust. He has upgraded the Trust's portfolio through the
re-development of existing properties, acquisitions, and the sale of
underperforming properties. Among other things, Jim was responsible for the
Marathon acquisition, which was the largest and most profitable acquisition in
the Trust's history.

"Proposed tax legislation, which would eliminate the favorable tax status of the
stapled-stock and paired-share REITs such as First Union, and the proxy contest
with Gotham have, however, profoundly changed the future for the Trust," Mr.
Gifford said. "We were unable to access the capital markets in the spring, which
curtailed Jim's plans for further investment and growth, particularly in the
parking business."

Mr. Gifford continued, "The character of our shareholders has also changed
dramatically. Our largest shareholders now include Gotham Partners, Apollo Real
Estate Investments, Franklin Mutual Advisors, Inc., Cerberus Partners, and their
affiliates, and we suspect that a large portion of our other shareholders are
like-minded investors who have followed Gotham into First Union shares. Gotham
has gone so far as to initiate a proxy contest to take control of the Trust's
Board of Trustees at tomorrow's Annual Meeting. Whether or not Gotham succeeds
in the proxy contest, we believe that it is in the best interests of the Trust
and its shareholders for Jim to step down in order to facilitate the appointment
of a new Chief Executive Officer who is more acceptable to our shareholder
base."

First Union Real Estate Investments is a real estate investment trust (REIT)
headquartered in Cleveland, Ohio, and traded on the NYSE.

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